GEORGE TOWN - One of Penang's oldest clanhouses - the Seh Tek Tong Cheah Kongsi - is under threat of being sealed and its assets seized in an ongoing legal spat with a developer over breach of agreement.
The Kongsi has been given seven days to pay more than RM4.7 million (S$1.79 million) to Hun Meng Development Sdn Bhd or risked the 205-year-old clanhouse being put up for public auction.
Penang High Court bailiff Yusmizan Yusoff conducted an attachment on the Cheah Kongsi's moveable assets by way of a writ of seizure and sale at the premises in Armenian Street here.
The attachment, which stated that the public auction would be held on Feb 23, was carried out at 12.30pm yesterday.
Cheah Kongsi's lawyer Lee Khai said the writ was not expected to affect its operations.
Its chairman Cheah Swee Huat, however, said the premises had been closed to the public for the past two years for renovation but remained open to members.
Hun Meng Development obtained the writ after Cheah Kongsi failed to comply with a High Court order on Sept 30 last year. The application for the writ was made on Jan 29 and issued by the court on Feb 6.
Hun Meng Development had sued Swee Huat and Cheah Kongsi's secretary Cheah Sin Choon for breach of contract in respect to a joint venture agreement.
Last Sept 30, High Court Judicial Commissioner S. Nantha Balan held that Cheah Kongsi had to pay the developer compensation of RM3.5mil, a refund of the RM50,000 deposit, interest and costs, after finding that the Kongsi was liable for repudiating the Joint Venture Agreement entered between both parties on March 5, 1999.
Penang High Court bailiff Yusmizan Yusoff (right) putting up the writ of seizure and sale (writ penyitaan dan penjualan) at the entrance of Seh Tek Tong Cheah Kongsi Star pic by: ZHAFARAN NASIB/The Star/ 09 Feb 2015. Penang High Court bailiff Yusmizan Yusoff putting up the writ of seizure and sale. The agreement was for the development of two plots of land in Victoria Street belonging to the clanhouse.
Hun Meng Development had claimed that the clanhouse had refused to hand over the title deeds, resulting in the company failing to carry out work as per plans approved by the Penang Municipal Council between October 2006 and November 2008.
Cheah Kongsi had maintained that the agreement was not binding as its trustees, who executed it, were not authorised to do so.
It also held that it was unable to hand over the title deeds as there was no court order sanctioning and approving the transfer of the two lots to the developer.
Cheah Kongsi had applied to the Penang High Court for a stay of execution of the judgment but was dismissed on Jan 21 with costs of RM3,000.
When asked for comments at the Cheah Kongsi office after the attachment was carried out, Swee Huat said he would leave it to his lawyer.
Lee said an application for a stay of execution would be heard by the Court of Appeal on Feb 26.
Hun Meng Development was represented by Yiew Voon Jin.
Also present were the company's managing director Datuk Lai Ah Han and director Ooi Ark Heng.